Welcome to Khon Kaen

Khon Kaen is the second largest of the northeastern provinces of Thailand.The province is the commerce and political center of Northeastern. Located in the heart of northeast region of Thailand (Isaan), this community was experiencing one of the fastest growth rates in Thailand until the baht was devalued in 1997. In the last several years, construction has restarted within the city, including the widening of Mitaprahp Road on the West side of Khon Kaen (Highway 2 Bangkok-Nong Khai). The government had endorsed Khon Kaen as the export center for trade into the Indo-China Region, but politics may play a role in preventing this. Laos and Vietnam have located consulate offices in the city to process visa applications. The city also hosts the largest university in the North East, Khon Kaen University.

What is the best time to visit Khon Kaen?

The average temperature in Khon Kaen province ranges between 21.89 to 32.53 degree Celsius throughout the year and hence a business visit during any time of the year is fine.

Corporate income tax exemption for eight years provided that projects with capital investment of 10 million baht or more (excluding the cost of land and working capital) obtain ISO 9000 or similar international standard certification within two years of its start-up date, otherwise the corporate income tax will be reduced by one year;

Exemption of import duty on raw or essential materials used in the manufacturing of export products for five years;

Deduction from net profit of 25 percent of the project’s infrastructure installation or construction costs in addition to normal depreciation, and such deduction can be made from the net profit of one or several;

Fifty percent reduction of corporate income tax of net profit derived from its investment for five years after the exemption period.

Double deduction for transportation, electricity and water costs for 10 years from the date of first revenue derived from promoted activity.

Seventy-five percent import duty reduction of the normal rate on raw or essential materials used in manufacturing for domestic sales for five years. The Board will give approval for a period of a year. Similar raw or essential materials to the imports must not be available in the Kingdom in similar quality and quantity as necessary for the procurement. This incentive is not available to projects in Laem Chabang Industrial Estate and industrial estates or promoted industrial zones in Rayong Province.

Regional Investment and Economic Center 3, Khon Kaen is responsible for Green Area
Contact Address for Industrial Estate, BOI and Provincial Industry Office
Regional Investment and Economic Center 3 (Responsible for Green Area)
177/54 Moo.17 Mitraphap Rd, Muang, Khon Kaen 40000
Tel: 043 271300-2
Fax: 043 271309
E-mail: khonkaen@boi.go.th
Website : http://khonkaen.boi.go.th and/or www.boi.go.th
Khon Kaen Provincial Industry Office
Tel: 043 333115-6
Fax: 043 241810
E-mail: khonkaen@m-industry.go.th
Federation of Thai Industries (Khon Kaen Chapter)
711/54 Moo 17, Mitrapap Rd., Naimuang, Muang district, Khon Kaen province
Tel.: + 66 (0) 43 227 832
Fax.: + 66 (0) 43 227 833
For more detail, please visit at http://www.ieat.go.th/ieat/index.blade.php?option=com_content&view=article&id=76&Itemid=116&lang=en (more contacted details are available in each place)
Incentives
Exemption on import duties on machinery;
Corporate income tax exemption for eight years provided that projects with capital investment of 10 million baht or more (excluding the cost of land and working capital) obtain ISO 9000 or similar international standard certification within two years of its start-up date, otherwise the corporate income tax will be reduced by one year;
Exemption of import duty on raw or essential materials used in the manufacturing of export products for five years;
Deduction from net profit of 25 percent of the project’s infrastructure installation or construction costs in addition to normal depreciation, and such deduction can be made from the net profit of one or several;
Projects located within industrial estates or promoted industrial zones in 36 provinces including Krabi, Kamphaeng Phet, Khon Kaen, Chanthaburi, Chai Nat, Chumphon, Chiang Rai, Chiang Mai, Trang, Trat, Tak, Nakhon Ratchsima, Nakhon Si Thammarat, Nakhon Sawan, Prachuab Khiri Khan, Prachin Buri, Phangnga, Phattalung, Pichit, Phitsanulok, Phetchaburi, Phetchabun, Mukdahan, Mae Hong Son, Ranong, Lop Buri, Lamphang, Lamphun, Loei, Songkhla, Sa Kaew, Sing Buri, Sukhothai, Surat Thani, Uttaradit, and Uthai Thani, as well as Laem Chabang Industrial Estate and industrial estates or promoted industrial zones in Rayong Province(2) are granted the above-mentioned tax and duty privileges as well as the additional privileges as follows:
Fifty percent reduction of corporate income tax of net profit derived from its investment for five years after the exemption period.
Double deduction for transportation, electricity and water costs for 10 years from the date of first revenue derived from promoted activity.
Seventy-five percent import duty reduction of the normal rate on raw or essential materials used in manufacturing for domestic sales for five years. The Board will give approval for a period of a year. Similar raw or essential materials to the imports must not be available in the Kingdom in similar quality and quantity as necessary for the procurement. This incentive is not available to projects in Laem Chabang Industrial Estate and industrial estates or promoted industrial zones in Rayong Province.
Tax and Duty Privilege
Inside industrial estates/promoted industrial zones+Laem Chabang Industrial Estate and promoted industrial zones in Rayong Province)*
Import duties on machinery
Exemption
Corporate income tax exemption
8 years
50 percent reduction of corporate income tax
5 years after the exemption period
Import duty on raw or essential materials used in manufacturing of export products
Exemption
Deduction of transportation, electricity and water costs
Double deduction for 10 years
Deduction of the project infrastructure installation construction costs
25% deduction from net profit
Import duties on raw or essential materials used in manufacturing products for domestic scale
75% reduction for 5 years with yearly approval** (excluding Laem Chabang Industrial Estate and industrial estates/promoted industrial zones in Rayong Province)
*For projects in Laem Chabang Industrial Estates or promoted industrial zones in Rayong Province application must be submitted by December 31,2014
**Application must be submitted by December 31,2014
Source : Thailand Board of InvestmentInvestment Privileges from Industrial Estate Authority of Thailand (I-EA-T)

I-EA-T FREE ZONE:

ENHANCED INVESTMENT POTENTIAL AND OPPORTUNITY IN AN INDUSTRIAL ESTATE

For over three decades, as a state enterprise established under the Industrial Estate Authority of Thailand Act B.E. 2522 [1979], the Industrial Estate Authority of Thailand (I-EA-T) has been carrying out its roles and responsibilities to develop ideal industrial estates perfectly equipped with an extensive range of infrastructure and facilities, coupled with a full-scale administrative system and numerous privileges. Based on such favorable attributes, each industrial estate is expected to be a production base that contributes to the competitiveness of all business operators.
To improve effectiveness and efficiency as a potential and performance-enhancing tool for investors and operators in industrial estates, the Industrial Estate Authority of Thailand Act B.E. 2522 [1979] was amended and re-enacted as the Industrial Estate Authority of Thailand Act (No.4) B.E. 2550 [2007] to meet the needs of today’s dynamic marketplace and obligations under World Trade Organization (WTO) agreements.Fundamentals of the Industrial Estate Authority of Thailand Act (No.4) B.E. 2550 [2007]
Industrial estates are divided into two zones: General Industrial Zone and I-EA-T Free Zone – in lieu of an Export Processing Zone, whereby no export conditions are imposed in accordance with WTO obligations.
The operation of service businesses are allowed in a General Industrial Zone, where service operators are granted the right to land ownership.
Operators in an I-EA-T Free Zone are entitled to additional tax privileges.
The administrative process was streamlined to facilitate business operations in an I-EA-T Free Zone.
The process of industrial estate establishment and land allocation was improved to ensure faster and more convenient implementation.Enhanced Potential and Opportunity

An investors’ potential in operating a business in an industrial estate – be it in a General Industrial Zone or an I-EA-T Free Zone – are augmented by a wider spectrum of privileges and facilities that make each estate an ideal strategic production and service base designed to heighten competitiveness for both business operators and industrial estate developers.Investment in General Industrial Zone

Investors in a General Industrial Zone are eligible for following opportunities, options and privileges:
Permission to operate service businesses in the General Industrial Zone
I-EA-T provides industrial operators in a General Industrial Zone with comprehensive services essential for industrial operation – such as transportation, warehouses, training centers and clinics – as well as permission to own land required for their operations.
Non-Tax privileges for operators in a General Industrial Zone
The right to own land in an industrial estate
The right to bring in foreign skilled workers as well as their spouses or dependents
The right to remit money abroad

Investment in I-EA-T Free Zone

Under the most recent Industrial Estate Authority of Thailand Act, investors in an I-EA-T Free Zone are entitled to additional tax privileges and other preferences:
Privileges
Operators in an I-EA-T Free Zone are afforded the privilege of exporting products without any restrictions and with the added convenience of being able to bring merchandise or raw materials into an I-EA-T Free Zone.
Supplies taken into an I-EA-T Free Zone are entitled to improved tax and duty privileges.
Tax burden relief for products taken out of an I-EA-T Free Zone for domestic use or consumption. Contrary to the previous Act, content or raw material components, if produced domestically, are entitled to tax and duty exemptions.
Operators in a I-EA-T Free Zone remain entitled to privileges indicated in the previous Industrial Estate Authority of Thailand Act:

Tax privileges including;
import/export tax and duty exemptions; value-added tax (VAT) as well as excise tax on machinery, equipment, components, raw materials and supplies used for the production of goods and other merchandise
General privileges consisting of the right to own land, bring in technicians, experts, their family members and dependents, as well as the ability to remit foreign currency to their home countries

Operational preferences
Permission to import into Thailand or bring into an I-EA-T Free Zone, merchandise and raw materials for production, trade or service offering, without any restriction that importation of such material is limited to business operators.
Permission, for export goods producers, to bring supplies or raw materials into an I-EA-T Free Zone for manufacturing, mixing, assembling, packing or any other operations, without requiring any import permits or particular seals or symbols and with exemptions from standard and quality control requirements contained in any other laws – except those found in the customs law.

Increased Competitiveness of Industrial Estate Developers

The amended Industrial Estate Authority of Thailand Act was rewritten to increase industrial estate developer competitiveness, through the following:
The establishment of an I-EA-T Free Zone is now expedited through the issuance of I-EA-T Announcements – instead of Royal Decrees.
The land allocation process is now facilitated by allowing the I-EA-T Governor to grant approval according to I-EA-T-specified criteria, methods and conditions.

Thailand’s Competitive Potential on the Global Arena

The amended Act provides advantages to Thai operators on the global trade stage, through the following:
Thailand is to earn acceptance and recognition from member nations who also comply with WTO obligations resulting in a positive impact on trade and investment.
Operators will not encounter any retaliation on issues concerning government-subsidized export products by the WTO member nations, to which operators export their products.
Trade expansion can take place in accordance with free trade guidelines, propelling Thailand’s economy to greater heights.
Operator and entrepreneur confidence is improved.
Special privileges such as tax breaks are granted by the 150 WTO member nations.
Operators are able to conduct business more effectively as they can select appropriate trade markets – whether to sell products domestically or internationally – based on competitive conditions and thereby enhancing their capabilities for global market expansio

Financial Service

Bank of Thailand, northeastern branch, is located in Khon kaen province. Moreover, all of the government’s financial institutions have their branches in the province, including:
Bank of Agriculture and Agricultural Cooperatives
Government Saving Banks
Government Housing Banks
SMEs Banks, EXIM Banks, and
Islamic Bank of Thailand.
There are also the numbers of private financial institutions provincial wide.Source: Khon Kaen in Brief,Office of the Governor, Khon Kaen Province

Infrastructure Facilities

In the last several years, construction has restarted within the city, including the widening of Mitaprahp Road on the West side of Khon Kaen (Highway 2 Bangkok-Nong Khai). is quite easy by bus, air, train, or car. Thai Air has 4 to 5 flights daily to and from Bangkok.

Road system
Road connect to Bangkok and central region by national highway No.2
Road connect to Northern region by national highway No.12
Road connect to Vientiane (Laos) via Udonthani and Nong Khai by national highway No.2Public bus at Khonkaen city
2 Public bus station (locals bus and inter-province bus).
Hourly public bus to Bangkok.
Daily public bus to Major city in northern, central,eastern region.Railway
Railway system to Bangkok available at Khonkaen railway station.Air transportation
Air transportation to Bangkok available at Khon Kaen airport.

Investment Opportunities

From 2011 – 2014, Khon Kaen province strategic plan sets its vision to be “A safe city which links the trade, investment, service and transportation in the region with the foreign countries”. They plan to meet the objectives by following these strategic issues:

Strategic issues

1. Agricultural development to become the agricultural economic hub of the region

Jasmine rice value creation guaranteed by GAP standard for export;

Increase productivity and reduce the cost in growing sticky rice;

Increase sugarcane production;

Increase the productivity of cassava, used as materials for starch, ethanol and animal feeds;

Increase the Eucalyptus production to support the expansion of paper industry in Khon Kaen;

Increase productivity of mulberry growing to be the material for silk;

Increase beef cattle production.

2. Industrial development to strengthen the advantage from strategic location

Increase productivity and efficiency of the rice mills and grain drying to support the jasmine rice export;

Reduce the impacts towards communities from the process of cassava production and increase the efficiency in transportation;

Reduce the impacts from sugar factories and encourage community development projects by the factories;

Increase the productivity of ethanol;

Increase the production of silk especially the products which promote the province’ identity;

Increase the ICT and software products to promote the regional ICT hub.

3. Trade, tourism, service and infrastructure development to regional hub

Become the region’s tourism hub, focusing on the historical tourist attractions (Phu Vieng/ Phu Kum Kao) including attractive and unique the tourist activities;

Become the region’s trade hub by means of developing and linking international trade in parallel with the strategy to strengthen local entrepreneurs;

Provide sufficient infrastructure to facilitate the investments, service, finance, and transportation in accordance with the strategy to become the regional trade, service and investment hub of the province.

Macro Economic Indicators

Economic growth of the Khon Kaen province is quite visible through the growth patterns of gross provincial product and per capita income since last three years as depicted in the graph below.
Gross Provincial Product (GPP) at Current Market Prices by Economic Activities: 2007 –2009

Source: Office of the National Economic and Social Development Board

Key Business Sectors and Major Products
GPP statistics 2009 at current market price by economic activities (Office of the National Economic and Social Development Board) shows that the leading sectors which contribute to GPP are:

Mudmee is a unique technique of Isan in creating textile pattern. Silk threads are tied and dyed in particular patterns, resulting in beautiful textile patterns.
Mudmee Cotton at Ban Mueang Phia, Amphoe Ban Phai (ผ้าฝ้ายมัดหมี่ บ้านเมืองเพีย อำเภอบ้านไผ่) In most households, weaving a Mudmee cotton and mudmee silk tube skirt is quite a common business here.
Natural-dyed hand-woven cotton (ผ้าฝ้ายทอมือย้อมสีธรรมชาติ) The cotton textile is a famous product by the Art Centre for Developing Isan Women

Opportunities in Tourism

Historically, Khon Kaen is quite a new town, established a little over two centuries ago during the reign of King Rama I. But prehistorically, this town on the plateau has been home to various cultures as well as other fascinating creatures, heretofore unknown to the modern world. Artifacts have proven that millions of years ago the area was occupied by gigantic dinosaurs, several of which were endemic to the region. People in various cultures later occupied the plateau for thousands of years until the Ancient Khmer Empire expanded its presence into the area in the 12th century and ruled it for some time. The ancient cultures, traditions, and historical sites in this area have all
The ancient cultures, traditions, and historical sites in this area have all contributed to shaping the people and culture of Khon Kaen.
A major source of local wisdom regarding the production of silk is in Amphoe Chonnabot, where excellent Mudmee Silk is delicately woven by hand using a special tie-dye technique, and Khon Kaen features both creature comfort, in the form of fine eateries and swanky hotels, and beautiful nature, including a variety of animal parks and a number of spectacular national parks.
Khon Kaen is the commercial and political center of Northeastern Thailand, featuring a number of upscale restaurants and hotels, the largest university in the North East, and a busy airport.
In addition to containing some fascinating historical and archaeological sites, Khon Kaen is also an excellent place to watch the production of Mudmee Silk or participate in outdoor activities within one of its several animal reserves or national parks.Source: www.tourismthailand.org

Research and Development

Khon Kaen University
Khon Kaen University (KKU) was one of four regional universities established in 1964 as part of a decentralized development plan for higher education in Thailand. KKU is the largest education and learning center in the
Northeast of Thailand, and is recognized as the leader of new innovations in teaching and learning and research in the region. Khon Kaen city is the trade and administrative hub of the Northeast and is on a main transport route between the south and the Mekong Sub-region, and thus KKU is ideally placed to support the development of the Northeast and its neighboring counties.
KKU is committed to the development of its communities and its neighboring countries. KKU currently offers 31 International programs, and 11 English programs, with students from all our neighboring counties studying for degrees at KKU. As host to 18 Research Centers of Excellence, the E-Sarn software park and the Northeastern Sciences and technology Park, KKU is an active hub for innovation and research.
KKU has strong links with other universities in Southeast Asia through its GMSTEC and GMSARN membership, and the Scholarships for Neighboring Countries initiative. This initiative supports staff and students from institutions in the Greater Mekong region who have a memorandum of understanding with KKU, to come and study for higher degrees at KKU. This is a continuing program with new scholarships awarded annually, with the aim of significantly strengthening the human capital in specific areas in these neighboring countries. KKU annually hosts the Khon Kaen International Marathon, and also hosts a large number of regional events, such as the Northeastern Agricultural Fair and the Innovation Fair. KKU is continually seeking to improve the quality of its education, its services and its outreach.

Bring together engineers, researchers, and experts in the fields of Construction Materials, Transportations, Information technology, Geological Engineering, Water Engineering, Mechatronics, Logistics, and others to develop new technologies for the infrastructure development of the country

Support and conduct research to solve environmental and hazardous substance problems in the region as well as promoting the development of academic staff, graduates, equipment and facilities to enhance their ability to conduct research in this field by collaborating with others universities, industries and government for the benefit of the community and the nation as a whole

Why invest in Khon Kaen

The Khon Kaen province is the strategic location where North – South and East-West economic corridors meet.
Two main routes could link the whole GMS countries together.
Qualified academic institutions in the province guarantee the quality of educated labors from unskilled, semi-skilled to skilled labors.
Quality and up-to-date medical service and MICE service are available for everyone.
The huge reservoir, Ubonrat dam, some of the areas in Khon Kaen could generate alternative energy from natural sources.
The telecommunication system is linked everywhere. The telephone and internet signals are very good.
The government recognizes the importance of its strategic location.
It launches policies to promote Khon Kaen to become 1 of the ICT town among the three pilot provinces and the policy to economically restructure in agricultural, industrial, tourism and service sectors and the arena of trade and investment.Locating in the BOI zone 3, which will enjoy the following benefit:

Tax and Duty Privileges:
Exemption of import duty on machinery.
8-year exemption of corporate income tax with no cap
5-year 50% reduction of corporate income tax on net profit
10-year double deduction of transportation, electricity and water supply
Deduction from net profit of 25% of investment in infrastructure installation and construction costs in additional to normal capital depreciation
Reduction of corporate income tax by 50% for 5 years after the exemption period
Double deduction from taxable income of water, electricity and transport costs for 10 years from the date of the sales
Deduction from the net profit of 25% of the costs of installation or construction of the projects infrastructure facilities
Source: www.boi.go.thCost of Doing Business
Average wage : 167 THB per day (as of 1 January 2011)
Number of Employed Persons Aged 15 years and over by occupation, quarterly and sex in quarter 4 of 2009 shows that there are in the fourth quarter 1,010,100 labors in Khon Kaen province. 390,400 people are skilled agricultural and fishery workers. 158,900 people are service workers and shop and market sales workers. 155,000 people worked in elementary occupation. And 108,600 people are craft and related trade workers.Source: Statistical tables, Labour Force Survey: 2552-2553, Provincial level, National Statistical Office